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US-China goods trade hits record even as political split widens
Total merchandise trade between the two countries rose to $690.6 billion last year, exceeding the record set in 2018, Commerce Department data showed Tuesday. The data are not adjusted for inflation. The annual goods-trade deficit with China widened 8 percent to $382.9 billion, the biggest on record after the $419.4 billion shortfall in 2018.
The deepening trade ties between the countries risk being challenged by the widening split between Washington and Beijing, which have clashed on issues including human rights, trade and competition for technology and markets. The data also come at a particularly low point between the two amid the shooting down this week of an alleged Chinese spy balloon over US territory.
Washington is pressing ahead with plans to curb China’s access to sensitive semiconductor technology and is trying to get countries it considers allies to do the same.
It’s also working to lessen US reliance on China for merchandise, encouraging Western companies to invest in what Treasury Secretary Janet Yellen has termed “trusted
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continued from A10 in response to unauthorized Soviet incursions into US airspace, especially in the Arctic.
Many other countries and regions have similar air defense identification zones, including China, Japan and Taiwan. Taiwan, for instance, routinely scrambles fighter jets in response to unauthorized incursions of its airspace by Chinese aircraft.
Testing the waters—and air SO, given these clear international rules, the US was on very firm le- trading partners” such as India in a process known as friendshoring.
The value of merchandise exports to China climbed to an all-time high of $153.8 billion, while imports increased to $536.8 billion, just under the record set in 2018.
“It shows that consumers have minds of their own,” said William Reinsch, who served as a top Commerce official in the Clinton administration and is now a senior adviser at the Center for Strategic and International Studies, a Washington-based think tank. “At the market level, we’re still doing a lot of business, despite the efforts of both governments. The macro relationship hasn’t changed that much; we’re still trading a lot.”
Tariff strategy
THE Biden administration has kept in place a set of tariffs imposed under President Donald Trump and confronted Beijing over what it sees as human-rights abuses, unfair trade practices and threats to US national security.
But hundreds of US businesses big and small have made a fresh push for the removal of the levies—which gal footing in its response to the Chinese balloon. Overflight could only have been undertaken with US permission, which was clearly not sought. were instituted in waves starting in 2018—saying they have raised their input costs at a time of accelerating inflation.
China initially attempted to suggest the balloon malfunctioned and drifted into US airspace, claiming force majeure. If the balloon was autonomous, it would have been entirely dependent on wind patterns. However, a report in Scientific American said the balloon appeared to have a high level of maneuverability, especially when it appeared to linger over sensitive US defense facilities in Montana.
The deepening trade ties between the countries risk being challenged by the widening split between Washington and Beijing, which have clashed on issues including human rights, trade and competition for technology and markets. The data also come at a particularly low point between the two amid the shooting down this week of an alleged Chinese spy balloon over US territory.
As the White House reviews the tariffs, there’s little indication that the White House is inclined to significantly roll back the tariffs on the imports that span industrial inputs—such as microchips and chemicals—to consumer merchandise, keeping them in place as leverage against China and amid concerns that repealing them would be politically risky.
Chips flashpoint
THE chip industry continues to be a major flashpoint for trade tensions.
Though China is the biggest maker of phones and computers, US companies still control most of the underlying chip technology, and it tightened
Washington displayed a lot of patience in dealing with the incursion. President Joe Biden authorized military jets to shoot down the balloon, but it took some days before that could be done safely without endangering lives on the ground.
The balloon incident has clearly tested the Biden administration and the US response to China’s growing military assertiveness.
Similar events occur on a regular basis in the South China Sea, where the US Navy conducts freedom of navigation operations through Chinese claimed waters. The US presence is vigorously challenged restrictions on exports of semiconductors last year. Beijing in December filed a dispute with the World Trade Organization trying to overturn USimposed export controls, which aim to limit the Asian nation’s ability to develop a domestic semiconductor industry and equip its military.
Officials on both sides are looking at ways to better manage the differences between the two powers, with Yellen and Vice Premier Liu He holding in-person meetings in Zurich in January. That followed face-to-face discussions held by Presidents Joe Biden and Xi Jinping held in Bali, Indonesia, in November.
But the efforts to thaw relations took a knock after the Pentagon detected a suspected Chinese surveillance balloon lingering at high altitude over sensitive nuclear sites in Montana, which led to the postponement of a visit by Secretary of State Antony Blinken.
Trading partners by the Chinese Navy. China has also responded aggressively to the presence of US reconnaissance planes over the South China Sea, raising the risks of an accident that could spark a wider conflict.
CHINA maintained its third place among the top US trading partners for goods in 2022, accounting for 13 percent of total trade. Canada kept the top spot with a 14.9 percent share valued at $793.8 billion, while Mexico was second at 14.7 percent, or $779.3 billion.
The only change in the top-10 rankings relative to 2021 was Vietnam, which rose two spots to 8th position, with total trade of $138.9 billion.
What is remarkable about the balloon incident is China has asserted its physical presence well within America’s sovereign borders. How both sides respond in the aftermath will determine whether China-US tensions worsen further and if we can expect potential future provocations between the two sides in the air, as well as the seas. The Conversation
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By Jasper Emmanuel Y. Arcalas @jearcalas
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Members of the Sardines Canners Association of the Philippines (SCAP) have been seeking a price hike of P3 to help their business stay afloat.
SCAP Executive Director Francisco Buencamino said members of the group do not agree with the DTI’s decision on their petition.
“ That (P1.50 hike) is not acceptable,” Buencamino said during a media briefing organized by the Philippine Chamber of Agriculture and Food Inc. on Wednesday. “I do not think my members will agree that it was right.”
Buencamino said SCAP’s petition for a P3 price hike was meant to offset the rise in the costs of their raw materials, such as tin cans and imported tomato paste, which have been affected by the weakening of the peso and global headwinds. For one, he said the price of tin cans have gone up by 37 percent year-on-year.
Buencamino said the SRP on canned sardines has been “stagnant” since the start of the Covid-19 pandemic in 2020.
He claimed that some sardines manufacturers have been pulling out their stocks from supermarket shelves as they have been required to strictly observe the SRP, which led them to incur losses.
Buencamino said canners are now mulling over selling their stocks to other channels, such as wet markets and sari-sari stores, to be able to recoup costs.
P rior to the pandemic, he said canners were able to somehow earn from selling sardines at P18. Today, he said the pre-pandemic price of canned sardines is lower than the current production cost of canners.
ARDINE manufacturers will appeal the decision of the Department of Trade and Industry (DTI) to increase the suggested retail price (SRP) for canned sardines by only P1.50.B ased on the DTI’s latest SRP matrix released on Wednesday, only five specific brands of canned sardines were allowed to increase their SRP by P1.50.
Under the new SRP matrix, the prices of canned sardines range from P13.25 to P19.58, similar to that in the August 2022 SRP matrix.
SCAP had wanted to increase the price of sardines to P21 per can.
[At P21] that is break-even or there is some profit already. We have to increase by P3 to cover the rise in the costs of our production,” Buencamino said.
He said the industry will suffer sustained losses if the SRP for sardines remains below P20. What we will do is that we have options of selling not through supermarkets but through wet markets and sari-sari stores because they do not go with the SRP,” he said.
B uencamino said manufacturers are subjected to various supermarket fees which they are shouldering and this expands their overall costs.He also revealed that some canners are now grappling with a shortage in sardines.
MOA with BFAR
THE SCAP official said the memorandum of agreement (MOA) between the Bureau of Fisheries and Aquatic Resources and the SCAP did not deliver the requirements of canners due to issues related to the industry’s specifications.
H e said fishers who should supply the sardines to canners during the closed fishing season are unable to meet the required fish sizes and temperature. For one, he said the sardines being brought to the canners are larger than what they require.
T
By Andrea E. San Juan
T he DTI uploaded on its website on Wednesday the much-awaited SRP bulletin. Manufacturers have been requesting for the adjustments in the SRP for months. The latest bulletin, however, reflected tempered price increases.
In an interview with reporters on Wednesday, DTI-Consumer Protection Group (CPG) Undersecretary Ruth B. Castelo said Trade Secretary Alfredo E. Pascual opted to approve the price adjustments as the last SRP bulletin was released nearly six months ago.
This August 2022 suggested retail price bulletin, you would note that almost 6 months na rin yan bago natin i-galaw ulit kaya nagdecide na si Secretary Pascual na igalaw ito because nasa ‘danger zone’ na rin ‘yung mga manufacturers natin,” Castelo said.
‘Pag hindi pa natin pinayagan, lugi na sobra sobra at hindi na nila kakayanin so baka magsara or magstreamline ng production ang mga manufacturers so kailangan po talagang i-galaw this year pero tempered pa rin siya,” she added.
B ased on the latest price list, the price of Pinoy Tasty went up by P2 to P40.50 from P38.50 while Pinoy Pandesal (10 pcs/pack) rose by P1.50 to P25 from P23.50 . Bread manufacturers had initially asked for an increase of P4 last year.
HE Department of Trade and Industry (DTI) has approved the price increase requests of manufacturers of bread, sardines, luncheon meat, based on its latest Suggested Retail Price (SRP) Bulletin.It’s worth noting that bread manufacturers initially asked for a P4-increase last year. Philippine Baking Industry Group President Jerry Lao said in October the industry’s request for a price increase has been delayed for “six months already” because, he said, they wanted to help consumers stretch their purchasing power.
L ao said, however, the industry is already feeling the adverse impact of increases in the prices of sugar and fuel.
Meanwhile, Castelo said the DTI increased the price of canned sardines by P1.50. The figure is half of the P3 being sought by canned sardines makers.
L ast year, Canned Sardines Association of the Philippines (CSAP) Executive Director Francisco Bunecamino said the petition to increase the SRP for canned sardine by P3 was filed by his grop in July, months before the group warned of a “looming” raw material shortage in the latter part of the year.
B uencamino said the P3 proposed increase is a “very small portion” of the finished canned prices.
B ased on the latest price list, the SRP for canned sardines ranges from P13.25 to as much as P19.58.
M eanwhile, the price of one brand of luncheon meat increased by P3.50 to P39 from P35.50.
Castelo said the DTI did not yet consider the requests of other manufacturers for price adjustments as the agency is trying to balance the interest of consumers and manufacturers.
L ast January 24, the American Chamber of Commerce of the Philippines Inc. (AmCham) urged the DTI to regularly publish SRP bulletins, noting that its member companies are struggling to continue production given the rising prices of raw materials and services.
By Samuel P. Medenilla @sam_medenilla
REDUCING parking fees, imposing price control on essential goods, and providing aid to businesses can help minimize the adverse impact of high inflation on the country’s workforce, according to labor groups.
Federation of Free Workers (FFW)
President Sonny Matula said the government should consider rolling out non-monetary interventions to provide immediate relief to workers and employers from “price pressures.”
Such measures will complement their demand for minimum wage hike before the regional wage boards or in Congress, according to the labor leader.
He noted that reducing parking fees alone, which could be as high P60, can give workers substantial savings.
“ If that will be daily [reduced parking rates], it’s like giving workers a daily pay hike,” Matula said via SMS.
He also said the government should consider providing capital and subsidies to workers’ cooperatives and worker associations for their livelihood projects to help them generate additional income.
For its part, the Trade Union Congress of the Philippines (TUCP) said such technical aid should be channeled to grant facilities or low-interest lending to micro, small, and medium enterprises (MSMEs).
“ Such assistance should be premised on the MSMEs retaining their current employees and/or hiring more workers,” TUCP Vice President Luis Corral said via SMS.
Worse employment indicators
THE labor leaders made the pronouncements after the BusinessMirror reported that some local economists warned that high inflation, which already reached 8.7 percent last month, and “bloated” wage increases could cause more job displacements.
I n its latest Labor Force Survey (LFS) report, the Philippine Statistics Authority (PSA) announced that the number of unemployed increased to 2.22 million from 2.18 million last December compared to November 2022.
T he number of underemployed showed an improvement as it decreased to 6.2 million from 7.16 million in the same period.
O rganized labor said they anticipate a rise in the number of unemployed and underemployed in the coming months without the needed government intervention, especially with the projected global economic slowdown this year.
I’m expecting tough times [for workers] ahead should the expected recession among many of our trade partners happen,” Sentro ng Nagkakaisa at Progresibong Manggagawa (SENTRO) Secretary General Josua Mata said.
“ This is why we have been insisting on the need for a robust public employment program,” he added.
Government response
TO sustain the positive gains in the LFS particularly on the improving quality of employment, the Department of Labor and Employment (DOLE) said it is reviewing the effectiveness of its programs.
“Any decrease in employment rate, increase in unemployment level and increase in underemployment are indicators that will serve to propel us to review and assess our programs and strategies to do better,” Labor and Employment Secretary Bienvenido E. Laguesma said via SMS.
He said they are currently consulting with the private sector on how to make their programs “more responsive.”
L abor groups have been seeking an audience with President Ferdinand R. Marcos Jr. since last year so they can also provide inputs to the government’s labor policies.
BATAAN SUNSET The magnificent sunset in the coastal town of Morong in Bataan Province, which has become a favorite tourist destination because of its largely untapped beaches. JOEL PAREDES